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Rogers Communications (TSE:RCI.B) Says Canada Needs to Allow Foreign Ownership of Telephone and Cable TV Businesses


Thursday, April 15th, 2010

Canadian telecommunications companies like Rogers Communications (TSE:RCI.B), along with competitors BCE Inc. (TSE:BCE) and Telus (TSE:T) Corp., say that changing the rules of foreign ownership of telephone companies without including the cable tv industry makes no sense, and needs to be included in any changes the Canadian government ends up making in the industry.

Ken Engelhart, Rogers’s senior vice president of regulatory affairs, said at a Canadian parliamentary meeting, “If you artificially change the ownership rules for telecom but not for cable television, then you make it impossible for integrated carriers to pursue the advantages of foreign liberalization.”

With the two industries starting to offer both services, Rogers maintained it makes no sense to change the rules for one without changing the rules for the other, otherwise the advantages of opening up the Canadian market to increased foreign ownership wouldn't help.

Essentially what would end up happening would be for Canadian telecom companies to receive foreign investment capital while their competitors wouldn't, even though they may offer the same services as the other.

Most Canadian business related to the issue say the problem isn't allowing more foreign ownership, but making sure it applies to those who may or may not have broadcasting assets, and to all companies, regardless of size.

Telus senior vice president of regulatory affairs, Michael Hennessy, agrees saying, “It’s better to do nothing than to do something partial.”

It seems what has happened here is the Canadian government hasn't kept up with the changes in the industry, and separated the telecom industry from the cable industry, when in fact most companies are now involved in both, or are in the process of offering both services.

The industries are calling for the government to take both into account so they don't make decisions that will do more harm than good.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: cable tv , canada telecom , mobile phones , rogers communication , telecom , wireless carriers